2nd hand motorcycle

[mgrover]

So I've purchased a 2nd bike for £4350. Would it be worth sticking it on the company to offset against my profits since my BIK is 20% I think? Also I assume I can't claim any VAT back because its 2nd hand?

I owe 18k in CT, I paid this years off early, so I owe 9k technically now am but sure a rebate would be possible.

[malvolio]

As long as you only ride it to work and back, leave it away from your home so it is available to others if necessary and cover it with proper business insurance, put it on the books as an asset and depreciate it at a sensible rate, then that will be fine.

I suspect that won't happen...

Has it also occurred to you that such imaginative use of YourCo and its status is one of the main reasons why we have IR35, LCAG, Off-Payroll land all the other nonsenses we have to deal with...?

Thought not.

[ladymuck]

You definitely have to make sure that business use is included in the insurance cover.

The cost of that alone may give you pause for thought over the viability of your scheme.

[northernladuk]

From the information given. No.

Ty.

[Scruff]

You can purchase the motorcycle as a Company Asset. Forget about the VAT, as you have noted.

The cost of the motorcycle will be written off in full, in the Corporation Tax return, to be set off against Taxable Income. The asset will be recorded as a Fixed Asset and depreciated in YourCo.'s book. The Depreciation will be reversed in the Corporation Tax return.

This will be a benefit in kind which is reportable on form P11D in the future, where 20% of the cost of the bike, plus 20% of the running expenses in connection of this will be a benefit in kind. The company will pay NI on this at 13.8% (but it will also save CT on this NI at 19%) and you will pay tax on this via your tax code (applied to your salary) at your highest tax rate.

IANYA

[vwdan]

As long as you only ride it to work and back, leave it away from your home so it is available to others if necessary and cover it with proper business insurance, put it on the books as an asset and depreciate it at a sensible rate, then that will be fine.

I suspect that won't happen...

Has it also occurred to you that such imaginative use of YourCo and its status is one of the main reasons why we have IR35, LCAG, Off-Payroll land all the other nonsenses we have to deal with...?

Thought not.

I was under the impression a bike fell into the peculiar category of plant equipment, and didn't class as a company car or vehicle.

Not saying it's a smart move, but it seems there's more to consider.

[eek]

I was under the impression a bike fell into the peculiar category of plant equipment, and didn't class as a company car or vehicle.

Not saying it's a smart move, but it seems there's more to consider.

It does which is where the vague tax benefits come in (he might save a few quid in corporation tax).

See Tax benefits of company motorbikes - AJN Accountants

As with all vehicles (except electric cars at the moment) he is probably better just buying it personally and claiming mileage.

[Scruff]

It does which is where the vague tax benefits come in (he might save a few quid in corporation tax).

See Tax benefits of company motorbikes - AJN Accountants

As with all vehicles (except electric cars at the moment) he is probably better just buying it personally and claiming mileage.

Only if he does high mileage, and if the vehicle used primarily for business travel.

Buy it, use it and enjoy it.

[mgrover]

As long as you only ride it to work and back, leave it away from your home so it is available to others if necessary and cover it with proper business insurance, put it on the books as an asset and depreciate it at a sensible rate, then that will be fine.

I suspect that won't happen...

Has it also occurred to you that such imaginative use of YourCo and its status is one of the main reasons why we have IR35, LCAG, Off-Payroll land all the other nonsenses we have to deal with...?

Thought not.

Whys it imaginative use? The bike would be used for both business trips, personal pleasure and insured appropriately so not sure why its a problem? Why does some other business get to have a company vehicle but if I do it am a bad guy? Its simple maths, whats more efficient, paying the CT + Personal tax or paying the BIK

You definitely have to make sure that business use is included in the insurance cover.

The cost of that alone may give you pause for thought over the viability of your scheme.

Indeed thats a given

From the information given. No.

Ty.

You can purchase the motorcycle as a Company Asset. Forget about the VAT, as you have noted.

The cost of the motorcycle will be written off in full, in the Corporation Tax return, to be set off against Taxable Income. The asset will be recorded as a Fixed Asset and depreciated in YourCo.'s book. The Depreciation will be reversed in the Corporation Tax return.

This will be a benefit in kind which is reportable on form P11D in the future, where 20% of the cost of the bike, plus 20% of the running expenses in connection of this will be a benefit in kind. The company will pay NI on this at 13.8% (but it will also save CT on this NI at 19%) and you will pay tax on this via your tax code (applied to your salary) at your highest tax rate.

IANYA

Thought as much thanks

I was under the impression a bike fell into the peculiar category of plant equipment, and didn't class as a company car or vehicle.

Not saying it's a smart move, but it seems there's more to consider.

It does which is where the vague tax benefits come in (he might save a few quid in corporation tax).

See Tax benefits of company motorbikes - AJN Accountants

As with all vehicles (except electric cars at the moment) he is probably better just buying it personally and claiming mileage.

All in all it doesn't seem worthwhile in this case given I can't claim back the VAT and knocking basically £800 off my CT isn't all that worthwhile.

Cheers for the replies.

[malvolio]

Whys it imaginative use? The bike would be used for both business trips, personal pleasure and insured appropriately so not sure why its a problem? Why does some other business get to have a company vehicle but if I do it am a bad guy? Its simple maths, whats more efficient, paying the CT + Personal tax or paying the BIK

The clue was in the third paragraph. Or to put it another way, because you can doesn't mean you should.